Subject: Potential Long Term Transmission Purchase
From: [email-masked]
To: [email-masked]
Cc: [email-masked]
Date: Wed, 24 Oct 2001 09:03:20 -0700 (PDT)

we may have an opportunity to buy either 10 or 20 years worth of transmission from the northwest (john day) to COB.  we currently own roughly 170 MW of this under a long term deal with wapa that was assigned to epmi from pge back in 1998.

here's a summary of the facts on the new transmission
100 to 200 MW for either 10 or 20 years
purchase at prevailing pge rates -- if rates go up our payments go up.
monthly demand charge equal to roughly $1.10/MWh.  this equates to roughly $80k per month per 100 MW of transmission.
npv of the cost of the transmission (not value but cost) is $10 million per 100 MW for 20 years.
the spreads from nw to cob are roughly $2.50 on peak and $1.00 off peak.  line losses are roughly $0.75/MWh.
this transmission helps our cash, real time and services desks in addition to whatever value swerzbin extracts.
pge has the lowest tariff rates for intertie transmission.  can't guarantee that it will stay that way but is likely.
transmission rights would convert to an ftr if/when rto is implemented.
mike and i both want to do this transaction.
what do you think?
do we need to dash this?
we need to get this done by October 31.